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Outsourcing the Fire Service


     By M2 Resource Group, Inc Fire & EMS Subject Matter Expert Witness; Litigation Support; Psychological Testing & Counseling

PhoneCall John K. Murphy, JD, MS, PA-C, EFO at (206) 940-6502


This article looks at the trends of Cities and Town's looking to reduce the cost of providing services to the community targeting public safety.
The Scenario - A meeting between the City Manager and the Fire Chief occurred the other day and the Fire Chief was notified that as December 31, 2010 the City will not be providing fire protection services as they are going to outsource all public services to a private corporation. The City made this decision based on the current budget constraints, the loss of revenue and the need to provide other essential services to the citizens. The City Manager went on to say that the firefighters will be provided notice by HR at the end of this meeting and that the City wishes that the Fire Chief remain on board as a consultant to provide a seamless transition for those services.

The Reality – this scenario is actually occurring in many cities across our Nation and if not actually occurring in your area at this time, your elected and paid municipal leadership are looking at ways to cut costs and the fire service has become a target. We have been placed on notice and we better become proactive and not reactive to this reality.
In a recent article entitled Outsourcing Safety written by Autumn Giusti in an electronic periodical, American City and County , indicates that municipal budgets are continuing to experience shortfalls and that local government are essentially out of options. Now the focus for budget reductions is on public safety to balance the local government budget – a balancing act that will cut stations, personnel and look to outside contracting sources to provide these essential services. Cities and local government having essentially cut other municipal or county services to the bone have now targeted Fire, EMS and Police services. I am noticing in my part of the country, smaller communities are outsourcing to share costs of providing essential emergency and other municipal services. This is a result of the current economic situation and many more small to medium size communities are acting on the concept of outsourcing their public services – either to surrounding communities or to the private sector.

Outsource Bidding for Fire Protection –The City of San Mateo (CA) is joining a growing list of agencies vying to take over public safety duties in San Carlos where officials are considering contracting with San Mateo County for police protection and with the state for fire services. The Bay Area city of 28,000 has faced a deficit every year for the past decade, and the City Manager indicated San Carlos has exhausted its budget strategies. In budget meetings there was a continual request to the City directors to reduce their divisions more and more.

One of the comments from one of those directors indicated that the City could close a fire station. The city reportedly spends $9 million a year on police and $6.3 million on the fire department it shares with neighboring city, Belmont (CA). An analysis of a proposed outsourcing of services demonstrated the city could save $3.2 million on the police department and $1 million to $2 million on the fire department by outsourcing. The City of Sam Mateo indicated it can provide fire service in San Carlos at a cost of $5.3 million per year, according to an informal five-page proposal. That would represent a savings from the $6.2 million San Carlos spends on its joint fire department with Belmont.

The article goes on to say San Mateo's quote is higher than an earlier informal proposal from the California Department of Forestry and Fire Protection, or Cal Fire, which says it can do the job for between $3.5 million and $4.3 million annually. The competing proposals suggest a growing interest in a plan from San Carlos officials to outsource public safety services as they try to cut expenses and reduce a projected $3.5 million deficit in next year's budget.

Taking just the opposite position, in the City of Milpitas, the City Council has adopted a position that the city shall NOT outsource any Milpitas Fire Department operations to the State of California or other agencies, despite escalating employee costs to provide such services to residents. The council voted 4-1 June 15, with one Councilmember dissenting, to approve a request from a Councilman to NOT hand over the city's fire services to Cal-Fire, the state's lead fire agency. The Councilmember proposing the resolution indicated that talk of Milpitas contracting with Cal-Fire that had surfaced in newspaper advertisements and via resident’s website which was working against community values. In making the proposal the councilmember indicated the community needed to focus on its community values and the budget needs to reflect those community values and not to close Police and Fire stations or close the community center and library. The council unanimously adopted a total budget of nearly $130.2 million and approved formal agreements with the city's major employee unions that included seeing most city employees agreeing to slash pay by about 7 percent by taking 18 work furlough days, which equates to one and a half days a month.

In Dallas (TX), the City has recently been presented a proposal from a private ambulance service to outsource their EMS to the ambulance service. One of the arguments presentenced in their proposal is that firefighters should not have to deal with EMS issues and should focus on fire only. The proposal indicated a major cost savings to the City if the private sector is awarded EMS service. This is the tip of the iceberg.

On June 30, 2010 Maywood, California fired all of its full-time employees and now will contract out all of its municipal duties. The reason was that the city's workers compensation and commercial insurance carrier, terminated Maywood's coverage because of its claims history over the last five years as reflected in 2005-2010 Loss Summary Statements, the city says in a statement on its website. "As a result, the City of Maywood will be unable to administer a traditional staff," the statement reads. Shrinking grants and funding from both the state and the federal government also played a role in the decision, the statement says. However, in the statement, the Mayor sought to reassure Maywood residents that they would not experience a loss of service as a result of the decision. "Our community will continue to receive quality services," she says in the statement. "Maywood's streets will continue to be swept, our summer park programs will continue to operate, and our waste will be collected and hauled as scheduled. Further, the community will be protected and patrolled by the Los Angeles County Sheriff's Department."

Where did this all start? Reportedly, the Los Angeles County Sheriff's Department has provided contract police services since 1954 and claims it was the first agency to do so.

Outsourcing and combining services is not a new issue for newly incorporated cities for many municipal services. Many newer Cities have outsourcing of certain services as part of the incorporation plan. For example, when Deltona, Fla., incorporated 15 years ago with 86,540 residents, it relied on the County sheriff’s office for law enforcement. This may be setting the trend for smaller cities and towns to choose to outsource those municipal services. The purpose is to save money by consolidating certain municipal services especially public safety. In Deltona there were major savings in outsourcing those police services to the tune of about $3 million dollars.

The City of Sammamish (WA), incorporated in 1999, has been a contract City, outsourcing their police protection to the local County Sheriff and fire protection to a local Fire District. Currently there is a push to form a Regional Fire Authority under the applicable State of Washington statutes enabling Cities and fire districts for form a single entity with multiple partners of cities and other municipalities. The purpose is to create operational efficiency and hold down the cost of services for those cities and fire districts participating in this regionalization.

When we look across the country, read the newspapers and look in our own trade periodicals, the trend we see is in this period of declining revenue, cities are starting to seek viable alternatives to public services. In my experience with fire department budgets, about 70% to 75% of a fire department budget is for personnel costs and those costs are rising every year. Adding other municipal services like police, public works, planning and administration, just to name a few; the cost of providing those services rise faster than the revenue to support them. Those administrators are looking for a way to balance the budget.

In a recent Fire Engineering Legal Issues podcast entitled Cutbacks in the Fire Service which discussed closing firehouses, reducing the number firefighters and other essential fire protection services, it was pointed out that there are numerous standards such as NFPA providing a basis for a city or community to provide a safe fire response, not only for the firefighters but for the citizens. The question was posed, “what is the legal jeopardy for those communities cutting back fire services?” Currently there is no answer, but it appears that common sense, when looking to reduce the community budgets, has been tossed out the window when it comes to fire protection services.

From my point of view, politicians are under fire from all sides. The easiest thing for them to do is to look to alternative sources for the same services: They believe that they can outsource those services for less money and the fire service is starting to look like other municipal services - parks, waste management, and public works, only we have greater benefits and bigger pay raises. Our other downfall is our inability to market our own services to our own elected officials. Most politicians do not know what we do, when we do it. They do see however our 24 - 48 hour shifts, side jobs, firefighters driving high end vehicles and living well in this economic recession. We are not helping ourselves here.

Another contradiction in our service is the continuation of the myth that we can provide the same level of services with fewer dollars. We continue to reassure the community that we can provide services in spite of decreasing revenues and reduction in firefighters. What the community needs is a dose of reality and to tell them the truth – we cannot do the job with less dollars and we are seeking their assistance to safely provide fire and EMS services. We need to tell the community it may take more time to arrive at your emergency, with fewer resources and that is the new reality. Is the community willing to take that risk? I think they are – as they continue to vote down tax initiatives for fire protection and other essential community services.

The tax payer is getting tired of paying more taxes to keep a certain group of government workers working. The taxpayers themselves are already suffering from job loss, loss of home value, layoffs, reduction or elimination of health benefits and overall have been adversely affected by the current economy. They will and are fighting new taxes or a continuation of existing taxes to reduce their personal tax burdens.

I believe that the taxpayers are probably willing to play the risk game and not vote for higher taxes and the resulting endgame is reduced emergency services.

What is the future for the fire service in this period of declining revues, budget cuts and the trend to look at outsourcing as an alternative? Not being apocalyptic, our industry is and will be undergoing tremendous changes over the next five years. Private sector fire service and ambulance services are finding an audience with the elected officials. Certainly, in the big cities, the unions are very influential; but as we see in FDNY, the budget discussion placed 20 fire houses and hundreds of firefighters on the chopping block. Thank god that was avoided but it should be a wakeup call to the fire service that our municipal mangers are targeting the fire services. This is a national trend – budget restrictions and the closing of fire houses and reduction of firefighters.

As a Councilmember in Milpitas California indicated; there has been a recent and approved formal agreement with the city's major employee unions that included seeing most city employees agreeing to slash pay by about 7 percent by taking 18 work furlough days, which equates to one and a half days a month. This is the new reality.

The fire service needs to look inwardly and work aggressively with elected and appointed city or town officials to find the creative solution to end this crisis which means doing business differently, look to differentiate ourselves from the cops and public works, work with the unions on cost cutting or cost saving measures and to seek a different and efficient way to do business. We are talking about real money here. We need to look at some alternative source of funding. Fee for service is the white elephant in the room and for years a forbidden funding alternative in the fire service industry. Fee for service has been a great source of revenue for EMS and other private business. We need to change our way of thinking and get out of the box on these issues

I suggest that we look at ALL options to fund the fire service now before our firefighters are reduced to dangerous levels, our firehouses are closed and in the end, safety is compromised and the community suffers.

First published in fireengineering.com July, 2010

ABOUT THE AUTHOR: John K. Murphy, JD, MS, PA-C, EFO
John K. Murphy, JD, MS, PA-C, EFO, retired as a Deputy Fire Chief after 32 years of career service; is a practicing attorney and is a frequent speaker on legal and medical issues at local, state and national fire service conferences.

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While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.
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